City analyzes implementing a flat convenience fee for utility bill payments

The Denton Public Utilities Board convened on July 14, 2025, to discuss significant budgetary concerns, particularly focusing on the rising costs associated with credit card and e-check processing fees for utility bill payments. The city currently incurs approximately $1.3 million annually in these fees, which are not recovered through any dedicated charges.

Historically, a convenience fee was implemented in 2014 but was removed in 2020 due to regulatory changes that mandated a flat fee structure rather than a percentage-based fee. The board is now considering reintroducing a convenience fee to help offset these costs. Staff proposed a flat convenience fee of $2.90 per transaction, which would apply to online, phone, and kiosk payments, but not to recurring payments or in-person transactions.

Data presented during the meeting indicated that 97% of utility billing transactions occur online or via phone, suggesting that the majority of customers would be affected by the proposed fee. Two scenarios were analyzed: a $1 flat fee would recover about $460,000, while the proposed $2.90 fee could recover nearly all processing costs.

Board members expressed concerns about the fairness of imposing fees, particularly on residential customers who may struggle financially. Discussions included the possibility of differentiating fees based on payment methods, such as offering lower fees for e-check payments to encourage their use, as they are significantly cheaper to process.

The board is seeking feedback on whether to pursue the implementation of a convenience fee and will return with further options for consideration. The overall goal is to balance the need for cost recovery with the financial impact on residents, particularly those who may be more vulnerable. The meeting concluded with a consensus to explore these options further and to consider the implications for the upcoming budget.